KNOT Offshore Partners LP (KNOP): Business Model Canvas [Dec-2025 Updated]

You're trying to map out the engine room of a niche energy play, so let's look directly at KNOT Offshore Partners LP (KNOP)'s Business Model Canvas. Honestly, this Master Limited Partnership (MLP) is a pure-play on stability: they own a fleet of 19 high-spec shuttle tankers, securing them with giants like Shell and Equinor via long-term, fee-based contracts. That strategy is working, evidenced by their $963 million contract backlog as of Q3 2025, even as they manage significant debt loads. It's a tight, specialized operation. Dive in below to see the precise partnerships, key activities, and the cost structure that drives their distributions.

KNOT Offshore Partners LP (KNOP) - Canvas Business Model: Key Partnerships

You're looking at the core relationships that keep KNOT Offshore Partners LP (KNOP) running, the ones that secure the cash flow and keep the fleet operational. Honestly, for a master limited partnership like KNOP, these partnerships aren't just nice-to-haves; they are the engine room of the entire structure.

Knutsen NYK Offshore Tankers AS (KNOT) for Vessel Drop-downs and Management Services

The relationship with the sponsor, Knutsen NYK Offshore Tankers AS (KNOT), is central to KNOP's existence, as KNOT is the entity that spun off KNOP in 2013. KNOT remains the market leading independent owner and operator of shuttle tankers, controlling the entire value chain, including technical and commercial management services for KNOP's fleet. This relationship is so close that KNOT made an unsolicited, non-binding offer on October 31, 2025, to acquire all publicly held common units for $10 in cash per common unit.

The fleet growth mechanism has historically relied on vessel drop-downs from KNOT. For example, KNOP acquired the 2022-built Daqing Knutsen from KNOT on July 2, 2025. The transaction details show a purchase price of $95m, offset by $70.5m of outstanding debt plus $0.3m in capitalized fees, resulting in a net cash cost to KNOP of $24.8m. To secure this asset, KNOT provided a guarantee on the hire rate for the Daqing Knutsen until 2032.

Major Oil and Gas Producers as Charterers

The stability of KNOP's revenue is directly tied to the long-term contracts with major energy producers, which are the lifeblood of this business. As of September 30, 2025, the contractual backlog stood at $939.5m, backed by these leading energy companies.

We've seen recent contract extensions and new deals that lock in revenue well into the next decade. Here's a quick look at some of the key charterer activity as of late 2025:

Overall fleet coverage looks tight, which is great for near-term revenue visibility. For 2026, 93% of vessel time is covered by fixed contracts, which rises to 98% if all relevant options are exercised.

Financial Institutions for Debt Refinancing

Managing the balance sheet, especially with $986.5 million in total interest-bearing obligations as of September 30, 2025, requires strong relationships with lenders. KNOP has been actively strengthening its balance sheet, completing four debt refinancings in the second half of 2025. The average margin paid on the Partnership's outstanding debt during Q3 2025 was approximately 2.22% over SOFR.

You can see the specific lenders involved in these recent, crucial transactions:

• MUFG Bank (Europe) N.V.: Entered into a new $71.1 million senior secured term loan facility for the Synnøve Knutsen on October 20, 2025.
• NTT TC Leasing Co, Ltd.: Rolled over the first of the two $25 million revolving credit facilities (RCF) on August 15, 2025.
• SBI Shinsei Bank, Limited: Completed the refinancing of the second $25 million RCF on November 25, 2025.
• Sale & Leaseback Counterparty: Unlocked $32m in net proceeds from the Tove Knutsen refinancing completed on September 16, 2025.

The two revolving credit facilities mature in August 2027 and November 2027, respectively.

Shipyards for Scheduled Drydocking and Maintenance

Keeping the fleet of 19 vessels, with an average age of 10.0 years as of September 30, 2025, in top shape requires scheduled maintenance, which is a key operational partnership. The Tove Knutsen already underwent its scheduled drydocking in July. Looking ahead, management confirmed plans for 4-5 dry dockings scheduled for 2026. These shipyard relationships are critical for maintaining the high utilization rates, which hit 99.9% (or 96.5% factoring in the Tove Knutsen drydocking) in Q3 2025.

KNOT Offshore Partners LP (KNOP) - Canvas Business Model: Key Activities

You're looking at the core actions KNOT Offshore Partners LP takes to generate revenue and manage its specialized asset base. It's a capital-intensive operation, so the key activities revolve around acquisition, financing, and keeping those high-value assets earning their keep under long-term contracts.

Owning and Operating a Fleet of Specialized Shuttle Tankers

The fundamental activity is owning and operating a fleet of shuttle tankers designed for offshore oil transportation. As of September 30, 2025, KNOT Offshore Partners LP managed a fleet consisting of 19 vessels, which carried an average age of 10 years at that date. This fleet is the primary revenue-generating resource.

Operational performance is tracked rigorously, showing near-perfect uptime:

• Scheduled fleet utilization for Q3 2025 reached 99.87%.
• Overall utilization, accounting for scheduled downtime, was 96.49% for Q3 2025.
• The Windsor Knutsen resumed operations on June 4, 2025, after its scheduled maintenance period.

Conducting Mandatory Vessel Maintenance and Drydocking

Maintaining high utilization, which hit 99.9% for scheduled operations in Q3 2025, requires proactive maintenance. This includes mandatory drydocking, which is a planned off-hire event. The Tove Knutsen underwent its scheduled drydocking during Q3 2025. Looking ahead, management confirmed plans for 4 to 5 dry dockings scheduled for 2026. General and administrative expenses remained stable, with no significant increases anticipated even after fleet expansion.

Acquiring New Vessels from KNOT

Fleet rejuvenation and growth are achieved through acquiring vessels from its sponsor, KNOT. The most recent example is the Daqing Knutsen. This activity is a critical part of the strategy to secure long-term contracted revenue streams.

Here are the specifics of that July 2025 transaction:

The Daqing Knutsen, a 2022-built DP2 shuttle tanker, immediately began operating under a time charter to PetroChina in Brazil through July 2027, with KNOT guaranteeing the hire rate until 2032.

Securing and Extending Long-Term Time Charter Contracts

Securing long-term contracts is vital for revenue visibility, which stood at a fixed backlog of $963 million as of September 30, 2025, averaging 2.6 years. The activity involves negotiating extensions on existing charters and securing new ones, especially in the tightening markets of Brazil and the North Sea.

Key contract developments in 2H 2025 include:

• Hilda Knutsen: Extension with Shell for 3 months firm (to June 2026) plus an option for a further 9 months (to March 2027).
• Bodil Knutsen: Extension with Equinor secured through March 2029 (fixed) plus two charterer's options each for one year.
• Fortaleza Knutsen: New time charter executed in November 2025, commencing Q2 2026 for a fixed period of one year plus two charterer's options each for one additional year.

This coverage translates to strong forward visibility:

• 93% of vessel time covered by fixed contracts in 2026.
• 69% of vessel time covered by fixed contracts in 2027.
• If all relevant options are exercised, coverage rises to 98% in 2026 and 88% in 2027.

Managing Significant Debt and Executing Strategic Refinancings

Managing the balance sheet, particularly debt obligations, is a constant key activity, with a stated goal of repaying debt at $95 million or more per year. The second half of 2025 saw the execution of 4 refinancings to manage maturities and optimize capital structure. These actions validated the robustness of the model.

The four refinancings in 2H 2025:

Available liquidity stood at $125.2 million as of September 30, 2025, comprising $77.2 million in cash and $48 million in undrawn credit facility capacity. Finance: draft 13-week cash view by Friday.

KNOT Offshore Partners LP (KNOP) - Canvas Business Model: Key Resources

You're looking at the core assets that power KNOT Offshore Partners LP's operations as of late 2025. Honestly, the most tangible resources here are the ships and the contracts that keep them busy. The specialized technical and operational expertise for shuttle tanker services is definitely underpinning the high performance we saw in Q3 2025, with fleet utilization hitting 99.9% overall, even accounting for the scheduled drydocking of the Tove Knutsen, which resulted in an overall utilization of 96.5%.

The physical and contractual backbone of KNOT Offshore Partners LP is best summarized in this snapshot:

That contract backlog of $963 million provides solid revenue visibility, especially with charterers' options potentially adding further duration. Beyond the contracts, having ready capital is crucial for opportunistic moves or managing drydocking schedules. As of September 30, 2025, KNOT Offshore Partners LP maintained a strong liquidity position.

• Total Available Liquidity: $125.2 million
• Cash and Cash Equivalents component: $77.2 million
• Undrawn Capacity on Credit Facilities component: $48 million

This liquidity was $20.4 million higher than the balance reported at June 30, 2025. Finance: draft 13-week cash view by Friday.

KNOT Offshore Partners LP (KNOP) - Canvas Business Model: Value Propositions

You're looking at the core reasons why KNOT Offshore Partners LP secures and maintains its contracts in the specialized crude oil transport sector. The value here is built on asset quality, operational consistency, and contract security.

Highly reliable, specialized crude oil transportation from offshore fields to terminals is the foundation. This reliability is directly supported by the current state of their fleet and market positioning, particularly in key areas like Brazil and the North Sea, where new production start-ups are driving demand.

Stable, predictable cash flow due to long-term, fixed-rate time charters is a major draw for investors. The visibility on future earnings is quite strong based on the secured contracts as of the end of Q3 2025.

High operational efficiency, demonstrated by 96.5% overall fleet utilization in Q3 2025 shows the assets are working hard. Even with the scheduled drydocking of the Tove Knutsen during that quarter, the performance was near-perfect.

Modern, high-specification DP2 shuttle tankers for complex offshore loading means KNOT Offshore Partners LP owns the right tools for the job. The recent acquisition of a new vessel underscores the commitment to fleet modernization.

Here's a quick look at the numbers underpinning these propositions from the Q3 2025 reporting period:

The stability is further evidenced by specific contract terms and forward coverage:

• Charter extension for the Bodil Knutsen secured through March 2029 plus two one-year options.
• New time charter signed for the Fortaleza Knutsen to start in Q2 2026, fixed for one year plus two one-year options.
• The Daqing Knutsen, a 2022-built DP2 shuttle tanker acquired in July 2025 for a net cash cost of $24.8 million, is chartered to PetroChina through July 2027.
• KNOT Offshore Partners LP is continuing to repay debt at $95 million or more per year.

The partnership's liquidity position also supports its operational continuity and ability to secure assets:

• Available liquidity on September 30, 2025, was $125.2 million.
• This liquidity comprised $77.2 million in cash and cash equivalents plus $48 million of undrawn credit facility capacity.
• The Q3 2025 cash distribution declared was $0.026 per common unit.

Also, the market is clearly valuing this operational strength, as the Q3 2025 Earnings Per Share (EPS) of $0.4459 was a 93.2% surprise over the forecast of $0.2308.

KNOT Offshore Partners LP (KNOP) - Canvas Business Model: Customer Relationships

KNOT Offshore Partners LP (KNOP) focuses on securing long-term, contractual relationships, which is the bedrock of its Customer Relationships block. You're dealing with a B2B service model where the customer is typically a major oil company or National Oil Company (NOC), not the end consumer.

The core of the relationship is the period charter, where the shuttle tanker acts as a 'floating pipeline,' moving oil from offshore installations to onshore facilities under a non-volume based contract. These vessels are often built to the specific requirements of the charterer and are intended for use on particular oilfields over extended periods. This structure inherently fosters deep, long-term engagement.

The operational excellence achieved by KNOT Offshore Partners LP directly supports the continuation and extension of these relationships. For instance, as of September 30, 2025, the fleet operated with 99.9% utilization for scheduled operations, translating to 96.5% overall utilization when accounting for the scheduled drydocking of the Tove Knutsen during Q3 2025. This high performance validates the service model for clients like Shell and Equinor.

Dedicated chartering teams actively manage contract lifecycles, securing extensions that build revenue visibility. This is evident in recent successes:

• Secured an extension with Shell for the Hilda Knutsen in August 2025, offering up to 1 year of further service (3 months firm plus options).
• In September 2025, KNOT Offshore Partners LP secured an extension with Equinor for the Bodil Knutsen, locking in the contract through to March 2029 fixed, plus two options of 1 year each.
• A new time charter for the Fortaleza Knutsen was executed to begin in Q2 2026 for 1 year fixed, followed by two charterer's options of 1 year each.
• The Daqing Knutsen, acquired in Q3 2025, has a time charter with PetroChina in Brazil running through until July 2027, with a guaranteed day rate basis extending to 2032.
• A newbuild vessel under contract with Equinor for Brazil carries a seven-year time charter, with an option for the charterer to extend by up to thirteen further years.

The strength of these long-term commitments is quantified in the backlog figures as of September 30, 2025. The fixed contract backlog reached $963 million, averaging 2.6 years in duration. This translates to significant forward coverage:

• 93% of vessel time in 2026 is covered by fixed contracts.
• 69% of vessel time in 2027 is covered by fixed contracts.

If all relevant options are exercised, coverage rises to 98% for 2026 and 88% for 2027. This high degree of contracted revenue demonstrates the success of the high-touch, B2B service model focused on securing the long-term employment of the fleet of 19 vessels.

Here is a snapshot of key customer contracts and coverage metrics as of late 2025:

The relationships are clearly anchored in multi-year commitments with major players in the key operating regions of Brazil and the North Sea, where shuttle tanker demand growth is being driven by new FPSO start-ups.

KNOT Offshore Partners LP (KNOP) - Canvas Business Model: Channels

You're looking at how KNOT Offshore Partners LP moves its services-shuttle tanker capacity-to the market, which is really about securing long-term, high-rate contracts. This isn't a spot market business; it's about locking in revenue visibility.

Direct negotiation and contracting with international oil and gas companies

The primary channel for KNOT Offshore Partners LP is direct, long-term contracting. The vessels, often built to specific requirements, are positioned to shuttle oil from offshore installations to onshore facilities, acting like a 'floating pipeline.'

The initial charters are typically secured with National Oil Companies and Oil Majors. This direct approach is key to the stability you see in their financials. For instance, the Daqing Knutsen, acquired in July 2025, is on a time charter with PetroChina in Brazil running through July 2027, with KNOT Offshore Partners LP guaranteeing the hire rate until 2032 based on potential option exercises.

The strength of this channel is reflected in the backlog figures as of September 30, 2025:

• $939.5 million of fixed contracts were on the books.
• The average duration for these fixed contracts was 2.6 years.
• Charterers' options added an average of a further 4.2 years to the coverage.
• The fleet, consisting of 19 vessels as of September 30, 2025, achieved a fleet utilization rate of 99.87% for scheduled operations in Q3 2025.

Brokerage and chartering markets for re-contracting vessels

While direct negotiation secures the core business, the chartering team actively works the market to maximize vessel value, especially when existing charters are ending or options are being considered. This involves maneuvering vessels between key operational areas like Brazil and the North Sea.

The chartering team's efforts directly impact the near-term coverage. You can see this activity in the recent charter adjustments:

• Agreement was reached with Equinor in September 2025 to extend the Bodil Knutsen time charter to a fixed term ending in March 2029.
• The Hilda Knutsen charter was extended by 3 months firm (to June 2026) plus a 9-month option (to March 2027).
• The Vigdis Knutsen began operating under a bareboat charter in November 2025 that expires in.

The market outlook, driven by FPSO start-ups in Brazil and production ramp-ups in the North Sea (like Johan Castberg through 2025), suggests this channel will remain strong, with management noting that charterers' options are likely to be taken up given the market tightness.

Investor relations for public unitholders (NYSE: KNOP)

For the public unitholders trading on the New York Stock Exchange under the symbol KNOP, the channel is focused on communication, capital return, and demonstrating intrinsic value, especially given the unsolicited buyout proposal received in late 2025.

KNOT Offshore Partners LP uses its earnings releases and investor communications to highlight financial discipline and value return. Here's a snapshot of the capital deployment channels as of late 2025:

The company actively signals its view on valuation to the market. For example, the buyback program was established on July 2, 2025, with units purchased at an average of $7.87 per common unit, which is below the $10.00 offer price, suggesting management believes the units trade at a discount.

Liquidity management is also a key communication point for investors:

• Available Liquidity (as of September 30, 2025) was $125.2 million.
• This comprised $77.2 million in cash and cash equivalents.
• Undrawn capacity on credit facilities was $48 million.

This financial transparency helps inform unitholders navigating the potential transaction where the sponsor, KNOT Offshore Tankers AS, proposed acquiring all public common units.

KNOT Offshore Partners LP (KNOP) - Canvas Business Model: Customer Segments

Global major and national oil and gas companies (IOCs and NOCs) form a core segment, securing shuttle tanker services under long-term charters.

Offshore oil field operators in niche regions like Brazil and the North Sea represent another primary customer base, with demand driven by new project startups and market tightening.

• The shuttle tanker market is reported as tightening in both Brazil and the North Sea as of late 2025.
• Charter extensions were noted with major clients like Shell and Equinor.
• One vessel is on time charter to PetroChina in Brazil through July 2027.

Income-focused public unitholders seeking distributions are a distinct segment, supported by the partnership's financial performance.

Here's a quick look at the operational scale supporting these customer relationships as of September 30, 2025:

The financial results for the third quarter of 2025 directly impact the unitholder segment:

• Q3 2025 Revenues: $96.9 million
• Q3 2025 Net Income: $15.1 million
• Available Liquidity: $125.2 million
• Q3 2025 Cash Distribution: USD 0.026 per common unit

Furthermore, the segment of public unitholders is directly addressed by the unsolicited, nonbinding offer received to acquire all publicly owned common units for $10 per common unit.

KNOT Offshore Partners LP (KNOP) - Canvas Business Model: Cost Structure

The Cost Structure for KNOT Offshore Partners LP is heavily weighted toward financing obligations and the direct costs of keeping its shuttle tanker fleet operational and certified. These costs are largely fixed or contractually driven, providing a degree of visibility but also representing significant cash outflows.

Debt Servicing and Interest Expense represent a major component of the overall cost base. KNOT Offshore Partners LP is actively managing its debt load, stating a commitment to repaying debt at $95 million or more per year as of late 2025. This ongoing repayment is considered prudent given the depreciating nature of the asset base. Furthermore, the cost of carrying this debt is significant; for instance, the finance expense in the first quarter of 2025 was $15.3 million. This figure reflected an increase from the prior year, partly due to an unrealized loss on derivative instruments in Q1 2025 compared to a gain in Q1 2024. The Partnership completed four debt refinancings in the second half of 2025 to manage its maturity profile.

Vessel Operating Expenses (VOE) are directly tied to the operation and upkeep of the fleet, which stood at 19 vessels as of September 30, 2025. These costs fluctuate based on activity, such as vessels entering dry dock. For example, Vessel Operating Expenses were $30.6 million in the first quarter of 2025, rising to $33.0 million in the second quarter of 2025. The increase in Q2 2025 VOE was attributed primarily to bunker fuel expenses and higher maintenance and upgrading costs related to vessels in dry dock.

Scheduled maintenance is a critical, recurring cost. KNOT Offshore Partners LP incurs costs for scheduled drydocking and maintenance, which are necessary to maintain class and operational readiness. The Tove Knutsen underwent a scheduled drydocking in July 2025. Separately, the Synnøve Knutsen commenced a scheduled drydocking in late October 2025, expected to complete in early December 2025. These maintenance periods are factored into utilization rates; for example, the Q1 2025 utilization rate of 99.5% was reduced to 96.9% when accounting for scheduled drydockings.

General and Administrative (G&A) Expenses are relatively stable compared to the other major costs. G&A expenses were reported at $1.8 million for the first quarter of 2025, decreasing slightly to $1.6 million in the second quarter of 2025. In thousands of USD, the Q1 2025 figure was $1,796 thousand, and the Q2 2025 figure was $1,540 thousand.

You can see a breakdown of these key operating and financing costs below, using the most recent reported quarterly figures available:

The Partnership's overall cost base is managed through operational efficiency, as shown by the high utilization rates, and proactive balance sheet management, including several refinancings completed in the second half of 2025.

• Debt repayment target: $95 million or more annually.
• Q1 2025 Vessel Operating Expenses: $30.6 million.
• Q2 2025 Vessel Operating Expenses: $33.0 million.
• Q1 2025 General and Administrative Expenses: $1.8 million.
• Q1 2025 Finance Expense: $15.3 million.
• Fleet size as of September 30, 2025: 19 vessels.

Finance: draft 13-week cash view by Friday.

KNOT Offshore Partners LP (KNOP) - Canvas Business Model: Revenue Streams

You're looking at how KNOT Offshore Partners LP generates its cash flow as of late 2025. The core of the business model is locking in steady income from its shuttle tanker fleet through long-term contracts.

The primary revenue driver is the collection of charter hire payments. For the three months ended September 30, 2025 (Q3 2025), KNOT Offshore Partners LP generated total revenues of $96.9 million. This revenue base is built upon securing long-duration contracts for its specialized vessels.

The specific line item for charter income in that period shows the direct contribution from the fleet:

This structure is designed for predictability, which is key for servicing debt and making distributions. The operational performance supports this, as KNOT Offshore Partners LP reported an Adjusted EBITDA of $61.6 million for Q3 2025. That number is a good proxy for the operational cash flow before accounting for things like depreciation and interest.

A recent structural shift in the revenue mix involves the transition of specific assets. For example, the Vigdis Knutsen began operating under a bareboat charter on November 4, 2025, following an option exercise by Shell to switch from its previous time charter arrangement. This new bareboat charter for the Vigdis Knutsen is set to expire in 2030. This type of charter structure changes how the revenue is recognized and often shifts certain operational costs to the charterer.

The revenue stream is further supported by fleet activity and contract extensions:

• Fleet operated with 99.87% utilization for scheduled operations in Q3 2025.
• Utilization was 96.49% overall, accounting for the scheduled drydocking of the Tove Knutsen during Q3 2025.
• The backlog of fixed contracts as of September 30, 2025, stood at $963 million, averaging 2.6 years.
• The Partnership repurchased 384,739 common units for a total cost of $3.03 million under its buyback program, which concluded in October.

Also, KNOT Offshore Partners LP is actively managing its debt structure to support these revenue-generating assets. For instance, the loan secured by the Synnøve Knutsen was refinanced on October 20, 2025, into a new $71.1 million senior secured term loan facility.

Finance: draft 13-week cash view by Friday.